BEAR CALL SPREAD	COVERED COMBINATION
About Strategy	Bear Call Spread Option Strategy  Bear Call Spread option trading strategy is used by a trader who is bearish in nature and expects the underlying asset to dip in the near future. This strategy includes buying of an ‘Out of the Money’ Call Option and selling one ‘In the Money’ Call Option of the same underlying asset and the same expiration date. When you write a call, you receive premium thereby r Read more..	Covered Combination Option Strategy This strategy involves selling OTM Call & Put Options and buying the underlying asset in either cash or futures market. It is also known as Covered Strangle as the profits are capped and risk is potentially unlimited. Risk: Un .. Read more..

BEAR CALL SPREAD Vs COVERED COMBINATION - Details

	BEAR CALL SPREAD	COVERED COMBINATION
Market View	Bearish	Bullish
Type (CE/PE)	CE (Call Option)	CE (Call Option) + PE (Put Option)
Number Of Positions	2	2
Strategy Level	Beginners	Advance
Reward Profile	Limited	Limited
Risk Profile	Limited	Unlimited
Breakeven Point	Strike Price of Short Call + Net Premium Received	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

BEAR CALL SPREAD Vs COVERED COMBINATION - When & How to use ?

	BEAR CALL SPREAD	COVERED COMBINATION
Market View	Bearish	Bullish
When to use?	This strategy is used when you are bearish in market view. The strategy minimizes your risk in the event of prime movements going against your expectations.	This strategy is mainly suited for investors who are moderately bullish on a stock and are comfortable with increasing their position in the event of a price decline.
Action	Buy OTM Call Option, Sell ITM Call Option	Sell 1 OTM Call, Sell 1 OTM Put
Breakeven Point	Strike Price of Short Call + Net Premium Received	(Purchase Price of Underlying + Strike Price of Short Put - Net Premium Received) / 2

BEAR CALL SPREAD Vs COVERED COMBINATION - Risk & Reward

	BEAR CALL SPREAD	COVERED COMBINATION
Maximum Profit Scenario	Max Profit = Net Premium Received - Commissions Paid	Strike Price of Short Call - Purchase Price of Underlying + Net Premium Received - Commissions Paid
Maximum Loss Scenario	Maximum Loss = Long Call Strike Price - Short Call Strike Price - Net Premium Received	Purchase Price of Underlying + Strike Price of Short Put - (2 x Price of Underlying) - Max Profit + Commissions Paid
Risk	Limited	Unlimited
Reward	Limited	Limited

BEAR CALL SPREAD Vs COVERED COMBINATION - Strategy Pros & Cons

	BEAR CALL SPREAD	COVERED COMBINATION
Similar Strategies	Bear Put Spread, Bull Call Spread	Stock Repair Strategy
Disadvantage	• Limited amount of profit. • Margin requirement, more commission charges.	Combinations can be profitable in sideways or rising markets. Greater combined net credit increases downside protection and potential return.
Advantages	• This strategy takes advantage of time decay. • Investors can get profit in a flat market scenario. • Investors can earn options premium income with a lower degree of risk.	Limited Maximum Profit on the upside. Covered Combinations should only be traded on stocks that are bullish.